Filing Number: 805632
|
| Filing Accepted: 2/7/2025 |
| Last/Business Name
*
|
|
|
BOCA GRANDE CLUB PHASE IV ASSOCIATION, INC.
|
|
First Name |
|
|
|
| Street Address
*
|
|
5000 GASPARILLA ROAD |
| City, State Zip
*
|
|
BOCA GRANDE,
FL
33921
|
| Email Address
*
|
|
KVEITENGRUBER@FARR.COM |
| Complainant Type:
*
|
|
Insured |
|
| Last/Business Name* |
|
BOCA GRANDE CLUB PHASE IV ASSOCIATION, INC. |
|
First Name |
|
KELSEY |
| Policy # * |
|
FIW1000106050 |
|
Claim #* |
|
05000001295 |
|
Attorney is Applicable
|
| Last Name* |
VEITENGRUBER
First Name *
KELSEY
Initial
J.
|
| Street Address* |
|
99 NESBIT STREET |
| City, State Zip* |
|
PUNTA GORDA
,
FL
33950
|
| Email Address * |
|
KVEITENGRUBER@FARR.COM |
|
|
| Insurer Type
*
|
|
 Authorized Insurer
 Unauthorized Insurer
|
|
|
| Insurer Name |
|
|
| Insurer Name* |
|
FRONTLINE INSURANCE UNLIMITED COMPANY
|
| Insurer Name* |
|
|
| Street Address* |
|
|
| City, State Zip* |
|
,
|
|
NAIC Company Code 10074 |
|
|
| Name of individual responsible for violation (if any):*
EDWARD FAULKNER
|
| Type of Insurance
*
Commercial Property & Casualty
|
|
|
| Reason for Notice
*
|
|
|
Claim Delay
|
|
|
*
Statutory provision(s) which the insurer allegedly violated.
|
|
|
|
| 624.155(1)(b)(1) |
|
Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
|
|
| 626.9541(1)(i)(3)(a) |
|
Failing to adopt and implement standards for the proper investigation of claims.
|
|
| 626.9541(1)(i)(3)(c) |
|
Failing to acknowledge and act promptly upon communications with respect to claims.
|
|
| 626.9541(1)(i)(3)(d) |
|
Denying claims without conducting reasonable investigations based upon available information.
|
|
| 626.9541(1)(i)(3)(g) |
|
Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
|
|
| 626.9541(1)(i)(3)(h) |
|
Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
|
|
*
Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
N/A
|
| |
*
Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
This claim arises from Hurricane Ian damage to the Insured’s property located at 5000 Gasparilla Road, Boca Grande, Florida 33923 (the “Property”) on September 28, 2022 (the “Loss”). The Property consists of 16 individually-owned condominium units and is governed by the Insured. Hurricane Ian made landfall on Cayo Costa, about 5 miles south of Boca Grande, as a Category 5 hurricane with peak wind speeds at 161 mph. All of the units within the Property sustained interior water intrusion as a result of the wind damage to the Property. The Insured put Frontline on notice of the Loss and made a claim within a few days of the Loss. Frontline responded by assigning Claim No. 05000001295 (the “Claim”).
The Insured acted quickly to retain vendors to perform mitigation work to protect the Property from further damage and then to complete repairs to the portion of the Property that was their responsibility as an association. Frontline’s appointed independent adjuster completed the first inspection of the Property on October 19, 2022 and confirmed covered wind damage to the Property. Frontline then appointed an engineer to further determine the cause of the Loss. The engineer retained by Frontline began its onsite inspection of the Property on November 8, 2022, but did not provide a report of its findings until about seven months later on May 31, 2023. Frontline also retained a second expert to review the mitigation expenses incurred by the Insured around the beginning of March 2023. The second expert subsequently produced a report dated July 9, 2023.
Frontline provided its first written letter to the Insured advising of its coverage position on April 4, 2023 nearly seven months after the Loss. That letter was sent by Frontline’s adjuster at the time – Michael P. Herum. In that seven-month period, the Insured had completed its mitigation of the Property begin repairs without any payment from Frontline. The Insured had to specially assess its unit owners to obtain funds to pay for the initial post-hurricane services rendered at the Property. In its April 4, 2023 letter, Frontline advised that the independent adjuster had confirmed covered wind damage to the Property and that Frontline was issuing payment in the amount of $412,795.44 after applying depreciation and the deductible. The letter also stated that the independent field adjuster observed “what appeared to be flood-related damages as well as interior rainwater damage that appeared to be related to wind-driven rain.” There were no flood damages to the Property, and the Insured did not make any flood claim with its flood carrier. There was also no information provided as to the basis for Frontline’s position that the water intrusion was caused by wind-driven rain without the requisite storm-created openings.
The letter also stated that the “mitigation contractor has also informed us that the water mitigation scope has expanded significantly, and Frontline was not notified of the increased scope of mitigation, nor was Frontline notified or allowed to inspect the property before materials were removed and or further mitigation efforts were performed.” At the time of this April letter, Frontline’s independent field adjuster had inspected the Property nearly six months prior and was aware of the conditions at the Property after the Loss. Furthermore, Frontline’s experts had been retained and inspected the Property prior to the letter. Frontline gave no specific details as to how their investigation was prejudiced. Furthermore, Frontline did not deny coverage on the basis of any prejudice to their investigation.
While Frontline continued its investigation, the Insured was forced to apply for an SBA loan to obtain additional funds to continue to pay their vendors. At the same time, the Insured was subjected to legal disputes with their two mitigation contractors – WrightWay Emergency Services and ServPro – who demanded payment despite Frontline not paying the Insured for the full amount of the services they rendered. The Insured was forced to hire legal counsel to find resolutions to those disputes to avoid the Insured being sued.
On July 31, 2023, Frontline’s new adjuster – now Mary Hamilton - sent a second letter to the Insured advising that it was issuing a second payment in the amount of $165,062.83 and again advising that it was denying coverage for a portion of the claim based on the policy exclusion related to wind-driven rain. The letter stated that their “expert inspected the loss and documented interior rainwater damage from both storm-created openings and wind-driven rain. The expert did not observe damage to the building envelope in all areas that had interior rainwater damage. The interior rainwater damage related to a storm-created openings are covered and were included in the estimate. The expert also observed elevated wall moisture readings at interior kitchen due to an apparent discharge of water from an internal source.” The letter also stated that “we are unable to indemnify you for the interior rainwater damages related to wind-driven rain or damage caused by a plumbing leak and or condensation from the HVAC system.”
The Insured’s public adjuster was also given a copy of the expert reports prepared by Frontline’s experts. Upon receipt of this letter and the report prepared by Frontline’s expert, the Insured engaged its own engineer to complete an independent investigation of the cause of the Loss. As set forth in detail in the engineer’s report (which has been provided to Frontline numerous times), the Insured’s engineer found that there was covered wind damage to every unit on the Property. The Insured’s engineer also addressed the various omissions in the report prepared by Frontline’s expert. It is clear that the engineer retained by Frontline did not complete a thorough investigation of the Property and did not prepare a complete report.
While the Insured was engaging its own engineer expert, Frontline retained counsel. On September 21, 2023, counsel for Frontline sent the public adjuster an RFI letter requesting various documentation related to the claim. The Insured’s counsel contacted Frontline’s counsel on September 26, 2023 to coordinate a telephone call to discuss the RFI. After speaking with Frontline’s counsel on October 13, 2023, Frontline’s counsel e-mailed the Insured’s counsel asking for any documentation the Insured had regarding how much the Insured had paid with regard to the claim for purposes of her “obtaining some authority to hopefully resolve the claims.” She also advised that she had reached out to Frontline “regarding pre-suit mediation” and would advise. Frontline’s counsel later advised on October 16, 2023 that the adjuster from Frontline – now Kristin Fitch - would be discussing the claim directly with the Insured’s public adjuster. In response to the request from Frontline’s counsel, the Insured’s public adjuster prepared a spreadsheet of all differences related to the claim and all costs that the Insured had incurred to date and expected to incur to complete all repairs. The public adjuster also spoke directly with Frontline’s adjuster, who conveyed that Frontline wanted to resolve the claim.
On November 1, 2023, counsel for the Insured sent an e-mail to Frontline’s counsel advising that the Insured would like to move forward with a pre-suit mediation and requested whether Frontline would agree. The Insured’s counsel also agreed to exchange “as much documentation and information ahead of mediation as possible to make mediation efficient and to give us the best change of reaching a pre-suit resolution.” The Insured’s counsel advised that the Insured would be “gathering the documentation you requested regarding the expenses incurred so far and any estimates for work that still needs to be completed, as well as the special assessments issued by the Association.” On November 13, 2023, the Insured’s counsel followed up with Frontline’s counsel on scheduling a pre-suit mediation.
Without receiving any further response, Frontline’s counsel issued a letter dated December 12, 2023 requesting the Insured to submit to an Examination Under Oath and to provide certain documents. The next day, Frontline sent a letter to the Insured’s counsel acknowledging her representation, after she had been representing the Insured for several months. The Insured’s counsel then coordinated a call with Frontline’s counsel and followed up with e-mail correspondence on January 9, 2024 confirming that the public adjuster was gathering all documents and would be providing via Dropbox link. The Insured’s counsel also provided information regarding the mitigation expenses incurred, as this was specifically requested by Frontline’s counsel. The Insured’s counsel also stated “[i]f you determine an EUO is necessary, we will comply with that request.”
On January 24, 2024, counsel for the Insured advised Frontline’s counsel that it was reaching a pre-suit resolution with WrightWay and requested confirmation that Frontline was agreeable to the Insured reaching a resolution. Frontline’s counsel advised that she did not believe Frontline would have an issue with it, although Frontline would continue to reserve its right to deny payment “for the mitigation services that we do not believe are covered under the policy or which we have found to be excessive amounts by WrightWay.”
On February 23, 2024, Frontline’s counsel sent another RFI letter and demand for an EUO, despite the fact that the Insured’s counsel had regularly been in contact with Frontline’s counsel regarding the status of the settlement with WrightWay, gathering documentation (including related to the settlement with WrightWay), and previously offering to coordinate the EUO. On March 1, 2024, the Insured’s counsel responded that the public adjuster was continuing to gather the requested documents. The Insured’s counsel also advised “regarding the EUO, as I have previously indicated, my client is happy to comply with this request. In our prior communication, I believe you indicated that you were not sure whether an EUO would actually be necessary, but you wanted to document the request. Thus, if you have determined that an EUO is now necessary, please advise. Again, my client is willing to sit for the EUO if you have determined it is necessary and would like to complete it as soon as possible to keep things moving forward with the claim.” Later that same day, the Insured’s counsel advised Frontline’s counsel that the public adjuster “has provided significant documentation to you via Dropbox regarding all costs that have been incurred, the backup documentation for such costs, and the costs that have not yet been incurred but are expected. Based on our prior communication, it was my understanding that this was the documentation you needed to proceed with the claim.” The Insured’s counsel also stated “please also advise if there is any particular documentation that you have requested that you do not believe my client has provided.” Later that same day, the Insured’s counsel received communication from Kristin Fitch – the adjuster at the time - that Frontline had appointed a new adjuster – James Carpenter – that would be taking over the claim.
The Insured’s public adjuster then coordinated a call with the new adjuster, Frontline’s counsel, and the Insured’s counsel to discuss status in light of the Insured’s response to the RFI, the new adjuster, and the prior discussions of attempts to reach a pre-suit resolution. The Insured learned at that time, on March 4, 2024, that Frontline had appointed new counsel. The new adjuster requested time for him and Frontline’s counsel to complete their reviews and that he “will be in touch to continue the adjustment of these losses.” The call between the public adjuster, James Carpenter, and counsel for the Insured and Frontline was scheduled to occur on March 18, 2024. Mr. Carpenter then advised the Insured’s counsel the morning of the call that they were not prepared to discuss the Insured’s claim. The call was re-scheduled for March 21, 2024. Throughout the call, Frontline advised that they wanted to work out a resolution of the Insured’s claim. The public adjuster had shared with the new adjuster and new counsel his spreadsheet of all incurred costs and any estimates for work that had not yet been completed. That spreadsheet was discussed during the call, and Frontline’s questions were answered. Following that call, Frontline’s new counsel requested that the Insured provide its current demand and current amount in dispute broken down per building and between mitigation, building damage, and ordinance and law. The Insured’s counsel responded the next day and advised the information would be forthcoming.
The Insured worked diligently to prepare an initial demand as requested by Frontline and their counsel. On May 3, 2024, the Insured conveyed its demand of $1,415,157.35 based on the summary of all repair costs incurred, estimated costs yet to be incurred, and costs associated with hiring an engineer, attorney’s fees and costs, and the public adjuster’s fees. The Insured’s counsel also reminded Frontline’s counsel of the engineer report that the Insured had received that substantiated their position that Frontline’s coverage defense had no applicability. In response, on May 6, 2024, Frontline proposed a pre-suit mediation, and the Insured agreed. After working for weeks to schedule the mediation, the mediation was scheduled for October 14, 2024 as the earliest possible date that was available for the mediator and all parties.
Leading up to mediation, the Insured’s counsel repeatedly inquired about the potential for pre-suit negotiations with Frontline’s counsel, but Frontline did not make any settlement offers. During that time, Frontline again changed adjusters – now for at least the fifth time. As a result, Frontline’s counsel began requesting additional documentation. On September 18, 2024, Frontline’s counsel e-mailed the Insured’s counsel “for missing documentation to ensure we are all prepared for the upcoming mediation.” These requests included updated documentation on costs incurred by the Insured. The Insured’s counsel provided additional documentation on September 20, 2024 to the Insured’s counsel. At that time, the Insured also conveyed a reduced demand of $1,387,819 because the Insured realized that it had failed to include recoverable depreciation in its initial demand. In an effort to continue working towards a pre-suit resolution, the Insured reduced the demand to take out the engineer costs, attorney’s fees and costs, and public adjuster fees and to add back the recoverable depreciation that Frontline had already approved. The additional documentation was acknowledged by Frontline’s counsel that same day.
On October 7, 2024, a week before mediation, Frontline requested “board of director notes/minutes from two years before the date of loss until one year after the storm” as well as information as to “which portion of the mitigation expenses are related to unit owners versus association.” The next day, on October 8, 2024, the adjuster at Frontline – now Edward Faulkner – sent an RFI letter. In the midst of preparing for Hurricane Milton, the Insured and the Insured’s counsel scrambled to provide all of the requested documentation, which was provided on October 9, 2024. Frontline never indicated that the documentation submitted was insufficient or anything additional was needed.
Subsequently, the mediation had to be cancelled as a result of loss of electricity resulting from Hurricane Milton. Despite the Insured’s desire and attempt to reschedule the mediation for as quickly as possible, the earliest date that Frontline was available for a new mediation was January 30, 2025. The mediation was rescheduled for that date.
The Insured’s counsel again made attempts to obtain a pre-suit offer from Frontline before the mediation, which Frontline failed to provide. On November 21, 2024, the Insured’s counsel sent Frontline’s counsel a detailed summary of the basis for the Insured’s coverage position, the weaknesses with regard to Frontline’s coverage position, and the basis for the Insured’s demand. Frontline did not provide any written response.
On January 15, 2025, about two weeks before the rescheduled mediation, Frontline issued another RFI letter. This was now the fifth RFI letter that the Insured had received from Frontline. In the RFI letter, Frontline attempted to allege that it had requested documentation from the Insured numerous times and that the Insured had failed to comply. However, as documented above, the Insured responded to every RFI letter received and was in regular communication with Frontline’s two attorneys and numerous adjusters. Despite the fact that this fifth RFI letter appeared to be just further delay tactics by Frontline, the Insured once again worked diligently to gather all of the documentation and to provide a thorough response by the date requested by Frontline. The Insured’s counsel sent a detailed response with attachments, along with a Dropbox link to various additional documents, to Frontline’s counsel on January 23, 2025. Other than one follow up question on January 29, 2025, which the Insured’s counsel addressed, there was no indication from Frontline that any of the Insured’s responses were insufficient in any way.
Nonetheless, Frontline’s counsel e-mailed the Insured’s counsel on the eve of mediation – at 5:01pm on January 29, 2025 – that Frontline had directed her “to cancel tomorrow’s mediation, as its investigation has been prejudiced.” There was no additional information provided by Frontline as to how their investigation was prejudiced. The mediation was then cancelled with the mediator.
As documented above, the Insured has made every effort to work out a resolution with Frontline. The Insured has delayed filing suit in an effort to reach a pre-suit resolution based on Frontline’s continued representations – through five adjusters and two attorneys – that it wanted to work out a resolution. The Insured jumped through every hoop given to it by Frontline – responding to five official RFIs and many other e-mails and verbal requests for information. Yet, Frontline has failed to make any attempt to resolve this claim and cancelled mediation that had been scheduled essentially since June 2024 at 5:01pm the day before mediation with no justification or explanation. It is clear that Frontline has not attempted to handle this claim in good faith and has failed to comply with its statutory obligations under Florida law. Frontline can cure its statutory violations by paying the full value of the demand previously made by the Insured for its claim.
|
|
|
*
|
The submitter hereby states that this notice is given in order to perfect the rights of the
person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.
Before submitting a Notice using this system, please verify that all text has been entered
correctly and completely. Once the Notice has been submitted, the text cannot be changed
or deleted.
|
DFS-10-363
Rev. 10/14/2008
|